 "FMC curbs abnormal volatility in castor seed, coriander")
Forward Markets Commission’s (FMC) attempts to control abnormal volatility and build-up of open interest with 100 per cent margins resulted in agri commodities’ highest ever delivery in castor seed in January 2015 on the National Commodity & Derivatives Exchange(NCDEX), the markets regulator said on Monday.
FMC had noticed abnormal volatility in prices and build-up of open interest in castor seed and coriander contracts. Hence, it directed the NCDEX to advance staggered delivery in these commodities effective December 29 instead of January 11 and levied 100 per cent margins with effect from December 26. The action resulted in castor seed stocks, which stood at 205,000 tonnes on December 19, 2014, increasing to 430,000 tonnes (worth Rs 2,100 crore) as of January 19, the highest stock deposited at exchange-accredited warehouses. Also, the open interest of January contract reduced from 346,000 tonnes to 36,000 tonnes during the period. A delivery of 203,000 tonnes (worth Rs 948 crore) on the NCDEX for castor seed January contract recorded the highest ever in any agri-commodities on futures exchanges, the statement noted.
Similarly, coriander stocks - which were 6,923 tonnes on December 19, 2014 - jumped to 10,858 tonnes as on January 19, 2015, while open interest fell from 27,130 tonnes to 2,840 tonnes in the period under review. In coriander also, the delivery of 8,230 tonnes (worth Rs 95 crore) executed for January contract at the NCDEX recorded the highest in coriander.
“The large-scale physical delivery on the exchange platform is a clear indication of the healthy participation of physical market players in commodity exchanges and the effective hedging on this platform,” the statement added.
FMC had noticed abnormal volatility in prices and build-up of open interest in castor seed and coriander contracts. Hence, it directed the NCDEX to advance staggered delivery in these commodities effective December 29 instead of January 11 and levied 100 per cent margins with effect from December 26. The action resulted in castor seed stocks, which stood at 205,000 tonnes on December 19, 2014, increasing to 430,000 tonnes (worth Rs 2,100 crore) as of January 19, the highest stock deposited at exchange-accredited warehouses. Also, the open interest of January contract reduced from 346,000 tonnes to 36,000 tonnes during the period. A delivery of 203,000 tonnes (worth Rs 948 crore) on the NCDEX for castor seed January contract recorded the highest ever in any agri-commodities on futures exchanges, the statement noted.
Similarly, coriander stocks - which were 6,923 tonnes on December 19, 2014 - jumped to 10,858 tonnes as on January 19, 2015, while open interest fell from 27,130 tonnes to 2,840 tonnes in the period under review. In coriander also, the delivery of 8,230 tonnes (worth Rs 95 crore) executed for January contract at the NCDEX recorded the highest in coriander.
“The large-scale physical delivery on the exchange platform is a clear indication of the healthy participation of physical market players in commodity exchanges and the effective hedging on this platform,” the statement added.